Clydesdale Bank is set to be hived off from its Australian parent company and then floated on the stock market.

The split of the Glasgow-based high street lender from National Australia Bank (NAB) is planned to go through by the end of the year.

Up to 30% of Clydesdale, which includes Yorkshire Bank, will be sold off to institutional investors.

The rest will be held by existing NAB shareholders.

In a half year results statement, NAB said: "Following a period of successful restructuring, the UK Banking business is now in a position to be demerged to shareholders and listed as a standalone retail and business bank."

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NAB said last autumn the Clydesdale demerger was an ''absolute priority'' after it reported a dip in full-year profits, which was blamed on its UK banking business.

However, it acknowledged there was "no certainty" the move would go ahead, remaining subject to approval by shareholders and regulatory authorities in both the UK and Australia.

"Additionally, the demerger and IPO will be a substantial and complex undertaking subject to a range of risks and issues," it said.

UK regulators have demanded NAB earmarks up to £1.7bn to cover potential losses from mis-selling and other conduct issues.